CHICAGO (WLS) — Vacancy rates in the Loop and the Magnificent Mile are up, but the I-Team is finding bright spots and reasons to be optimistic about Chicago’s retail future.
“I’m hoping some new stores will come in,” a Mag Mile shopper said.
“It doesn’t look good, it doesn’t look pretty,” remarked her friend.
The corridor on the north side of the Magnificent Mile may be the most discouraging for shoppers, where there is a string empty storefronts.
There will be more empty space when H&M moves out of their 60,000 square foot store, but the brand is staying on Michigan Avenue, just moving to the old Apple store.
“That is half the size, two floors of selling space and now they have an opportunity to reintroduce H&M,” said John Vance of Stone Real Estate, which tracks downtown vacancy rates.
In October of 2021, the I-Team reported the Mag Mile had more than a 19% vacancy rate. Now, Vance said it’s up to almost 27%.
Vance and other commercial realtors say most vacancies occurred during the pandemic but even before, large stores had been struggling to compete with online shopping.
“A 60,000 square foot store, over four levels, it’s not needed. It probably doesn’t work,” Vance said.
In the Loop, the vacancy rate is also up. In October of 2021 it was 26%. Now, it’s 28%.
But the tide could be turning. Women’s clothing store Aritzia announced it’s moving into the 46,000 square foot former Gap store, and Alo Yoga is bringing a flagship store to the center of Michigan Avenue.
Vance is also encouraged by a recent Chicago Loop Alliance report saying the Loop has the fastest growing residential population in Chicago and is the fastest growing downtown area in the nation.
“The Loop retail market has the ability to come roaring back,” he said.
And there is more encouraging news. Stone Real Estate said the Gold Coast and Fulton Market are bustling with very low vacancy rates. There are also other examples like H&M, where retailers didn’t close, but instead moved from large downtown footprints to smaller locations in the downtown district.